It does mean the debt is gone. It could be a prelude to a sale, a tidy-up / strengthening of the balance sheet or somehow connected to the FFP issue.
Converting the debt should be seen as a positive thing, it seems to me. The result is that the capital value of the club is massively overstated. The owners would have to take a giant hit if they chose to sell.
There is one number I can't make out in the number of shares allocated at a nominal value of 1p each, but it looks like they've issued 18 billion shares (or 25 billion, but that doesn't make sense). Isn't high finance silly?
I won't profess to know exactly how it works but I bet capital investment is safer than loans for the person who holds the capital. Any administration would try to pay a reduced rate in the pound on loans and debt but not sure about the shares. Would suggest a sale or worse for me. The board will know as well as anyone that the balance sheet is akin to a collapsed bank and, unless they pay someone somewhere in the region of 120 million (my estimate based on player assets etc) then they're banking on a huge valuation of goodwill (a plucked out of the air figure to assign value to the QPR brand) or promotion. Basically a promotion is the only thing that would stop them having to pay someone to assume control. I think the wolves are at the owners doors.
Or maybe people might have to accept that while TF might massively put his foot in his mouth, by jumping the gun and speaking before something is finalised from time to time, he is however a man of his word. He has always stated that the club is essentially debt free and it is the owners who are taking the hit. Things certainly haven't gone Tony's way since buying the club! Some might say he's been naive, some might say "the worst thing to happen to the club" blah blah, but can anyone really say that he's done anything other than try to make us a success? OK it might have failed, but 180 million quid worth of trying deserves nothing but praise for the effort in my book. But the poor guy is getting slaughtered. He's the only Chairman that has ever tried to move us forward and not asset strip the club, sell the players and do what he wanted. I personally feel sorry for him, especially if it is because of the abuse he's taking. If he is selling I do hope it's the Mittals who are taking over, cause anyone else could prove to a lot of people that Tony was the best thing for the club long term.
Just dawned on me - is the 0.01 valuation so that it cannot ever reduce in value? Not sure what that means in real terms.
Fair comment mate, you say it may be wolves are at the door, it could be a positive, maybe Red riding Hood is on the other side! Seriously though, l don't see this whole circumstance being a negative. I tend to lean in favour of a good outcome compared to where we are now. Fingers crossed.
It's official The media team are in charge of the sale and have chosen Gumtree The sale will be live in HD The club shop stock has been purchased by TK Maxx Potential new owners are North Korean
Is he making a killing from ISIS and the suicide bombers? (Sorry but my gallows humour kicked in for a moment)
I haven't seen the detail but I think this is good news. Instead of having a huge debt (albeit a "soft" loan from our existing shareholders) hanging over us, our shareholders have shown their commitment by exchanging that loan for share capital. It doesn't matter what the nominal value of that share capital is, that's pretty meaningless. The shareholders are now more restricted in how they can deal with share capital rather than debt and, for example, it is much less easy to get your money out of a company if it is "locked" into shares rather than a loan. Also there is no interest on share capital, although the board can decide to pay the shareholders (i.e. themselves) a dividend if there is leeway to do so. This tidies up the balance sheet and should help the FFP situation. Of course, this "tidying up" could be a prelude to a sale but I don't see that it is necessarily the case , especially as share capital, as opposed to debt, does limit their freedom somewhat.
Okay i don't claim to be some financial genius because i am not. However i have read some posts/info on the matter and many of the intelligent money people believe that it is actually a good thing and not some dodgy exit by the board. As i said on another thread, we should just chill and let these Billionaires shift money around.
Yes essentially it means we are now debt free. Of course as usually the case on Twitter some people go in to melt down. Tony Fernandes has been stupidly naive, but has hardly done anything other than try to do the best. It's failed miserably and yes he must shoulder the blame, as the man at the top, but does he really deserve the abuse he's received? I think not. In all likely hood it's probably tied in with the FFP negotiations. The FA have probably agreed to let the owners wipe out our debt so that we can start afresh and the cost cutting efforts the club have made actually help the club and we can balance the books. Fernandes has always claimed the club was debt free and the money was there's that was being put in, of course the haters have never believed that. Now he's proved that on that subject he's been a man of his word. We've all grown to love Clint Hill, Faurlin and a few others over the last few years, as they simply fight with every ounce of effort on the pitch, where we can see them fighting for the club. Well we might not see or here what is going on in the background, but in my book £181 million pounds is one hell of a lot of effort for our small club!? It may have been mishandled, but he is trying. I hardly see him as being the worst thing to happen to the club as so many seem to see him lately. I hope he is staying cause he's been true to his word and I think he deserves the time to get it right, however long that takes.
If we add this £181m to the £60m he wrote off earlier in the year, that is almost a quarter of a billion gone, I don't get it, is there any sound business reason that this can make sense. I just find myself asking, "Why?"
In normal business it doesn't, but this is football. In normal business you just wouldn't invest in something so risky, which is why football is a billionaires game and a status symbol. But you invest in football and expect to make a profit. Tony and the other board members invested heavily for a newly promoted side thinking it would ensure survival, it back fired and the debts started to build at a rate of knots. But as he's always said, they invest with the full knowledge that it could go wrong, but it was they the owners who were paying for it and not the club. This just proves it wasn't BS. They will continue to do so until Old Oak has been decided, it's this which is the grand prize. When you stand to make Billions on that project, you'll happily spend millions on the figurehead of the proposal to start Old Oak. The club and it's loses, training facilities and new stadium will all come cheap to them if they get Old Oak. It's if they don't win the bid, that's when I'll be worried. But until then we've got owners trying to move us forward, even if it is 3 steps backwards at the moment.
